SECURE 2.0 Student Loan Match Optimizer

SECURE 2.0 Brings Relief to Borrowers

For years, recent graduates faced a painful trade-off: pay down student loans or contribute to a 401(k) plan and earn the employer match. The SECURE 2.0 Act, passed in 2022, changes that equation. Beginning in 2024, employers can treat qualified student loan payments as though they were retirement plan deferrals when calculating matches. That means a borrower who diligently repays loans can finally receive the match dollars they were previously forfeiting. This calculator models how the rule works, shows how much match you can expect, and recommends how much to contribute directly to ensure you hit the employer’s cap.

Because employers set match formulas differently, the calculator is flexible. Some companies match 100% of the first 4% of salary, others match 50% up to 6%, and a few provide tiered structures. Enter the match rate (the percentage of contributions that the employer contributes) and the match cap (the percentage of salary eligible for match). The tool also tracks how much of your IRS elective deferral limit remains if you choose to make additional 401(k) contributions beyond the match.

Inputs in Detail

Your annual salary anchors the calculation because match caps are tied to salary. The employer match rate represents how many cents the company contributes for each dollar you contribute. A 100% match rate means dollar-for-dollar matching, while 50% means fifty cents per dollar. The match cap indicates the maximum portion of salary the employer will consider. For example, 4% means the plan matches contributions up to 4% of salary. Student loan payments must be made on qualified education loans and certified to the employer; enter the annual total. If you still plan to contribute directly to the 401(k), list that amount so the calculator can combine it with loan payments for match purposes.

Pay periods per year let the calculator express recommendations per paycheck. The IRS elective deferral limit determines how much you can contribute directly to the plan; for 2024, the limit is $23,000 for most workers under age fifty. We also include an expected investment return and an analysis horizon to estimate how employer matches could grow over time if left invested.

How the Match Is Calculated

Employers apply the match rate to the lesser of your combined deferrals (loan payments plus direct contributions) and the salary-based cap. The MathML expression shows the core formula used in the calculator.

In this formula, r is the match rate expressed as a decimal, D is direct 401(k) contributions, L is qualified loan payments, S is salary, and c is the match cap as a decimal. The calculator further splits the match into the portion earned solely from loan payments and the portion that requires direct contributions. This helps you decide whether it is worth contributing extra to capture unused match dollars.

Worked Example: Loan-Focused Employee

Imagine a software engineer earning $65,000 with a plan that matches 100% of contributions up to 4% of salary. She pays $7,200 per year toward student loans and can afford to contribute $3,000 directly to her 401(k). Her loan payments alone equal 11% of salary, but the plan only counts up to 4%, so she already meets the cap. The calculator reveals that she can earn the full match of $2,600 (4% of salary) without any direct contributions. However, making the $3,000 contribution still has benefits: it grows tax-advantaged and keeps retirement savings on track. The tool also shows that she will still have $20,000 of elective deferral capacity remaining, so there is plenty of room to increase contributions if cash flow improves.

Now consider a different worker earning $50,000 with a 50% match up to 6% of pay. He pays $2,400 annually on loans. The calculator shows that to capture the full employer match of $1,500, he needs combined loan payments and contributions equal to 6% of salary ($3,000). With only $2,400 in loan payments, he should contribute at least $600 to hit the cap, which equates to $23 per biweekly paycheck. Without that small contribution, he would leave $300 of employer money on the table each year.

Comparison Table for Strategy Decisions

Strategy	Employer Match	Employee Contribution	Net Retirement Boost after 10 Years*
Loan payments only	$2,600	$0	$34,772
Add $3,000 direct contribution	$2,600	$3,000	$72,169
Increase contribution to $6,500	$2,600	$6,500	$112,852
Reduce loans to minimum ($3,600)	$2,600	$0	$34,772

*Assumes a 6% annual return reinvested for ten years. The table highlights the compounding power of even modest contributions paired with employer matches unlocked via loan payments.

Using the Results

The output includes annual match dollars, the share triggered by loan payments, the recommended minimum contribution needed to capture any unused match, and per-paycheck amounts. It also estimates the future value of match dollars over your chosen horizon. If you see that loan payments already unlock the maximum match, you can decide whether to redirect extra cash to emergency savings or retirement contributions. Conversely, if you fall short, the per-paycheck recommendation makes it easier to budget for the exact amount needed to secure the full employer benefit.

The calculator also flags remaining elective deferral capacity so you can plan for catch-up contributions later in the year. Because student loan payments do not count toward the IRS limit, you can still max out the plan if your budget allows. Export the CSV to keep a record for HR discussions or financial planning sessions.

Limitations and Assumptions

The tool assumes a single-tier match formula and does not model employers with multiple breakpoints (for example, 100% of the first 3% and 50% of the next 2%). Check your summary plan description to confirm details. It also treats loan payments as evenly distributed across the year; if you make lump-sum payments, coordinate with HR to ensure they are recognized. The investment projection assumes a steady return and does not account for taxes or Roth versus pre-tax contributions. Finally, this calculator does not constitute legal advice; confirm eligibility rules and certification requirements with your benefits administrator. Despite these caveats, the optimizer clarifies how SECURE 2.0 can turn loan payments into retirement momentum.